Liquidation, Insurance Fund and ADL Compared 2026: Five Exchanges

When a futures position is liquidated, every exchange absorbs the loss in the same order: the market takes the position first, the insurance fund covers what the market can't, and only when the fund can't cope does auto-deleveraging (ADL) kick in and force-close the most profitable, most leveraged positions on the other side. The differences are in what liquidation costs you, how big the fund is and when ADL triggers. Insurance fund balances read from official public APIs on 2026-10-17: about 791 million USDT plus 500 million USDC in Binance's fund for BTCUSDT, about 388 million USDT in Bybit's shared BTCUSDT pool, about 140 million USDT for Gate's USDT-margined perps, and about 91.76 million USDT for OKX's BTC-USDT perp.

For an ordinary trader the plainest takeaway is that being liquidated always costs more than stopping out yourself. On top of the normal fee there is a liquidation or clearance fee, and most of the margin left over goes to the insurance fund. None of that is a trading fee, so no rebate comes back. Below are the rules side by side, then a 10,000 USDT position worked through (checked 2026-10-17).

Quick answer

• Order: market → insurance fund → ADL, the same on all five exchanges.
• Liquidation costs: Gate states a 0.075% liquidation fee rate. OKX charges your current taker rate as the liquidation fee plus a clearance fee equal to the maintenance margin. Binance charges a liquidation clearance fee on notional at a rate set in its trading rules. MEXC's official API lists a 0.04% liquidation fee rate for BTC_USDT.
• ADL trigger: Bybit uses an 8-hour drawdown trigger line per trading pair (30% in its official example). Bitget triggers when that coin's insurance fund is used up. Binance, OKX and Gate say when the fund can't take over the position.
• ADL ranking: everywhere, more profit and more leverage puts you nearer the front. Positions closed by ADL pay no trading fee.

How liquidation, the insurance fund and ADL hand off

When your margin falls below maintenance margin (Gate words it as account maintenance margin ratio at or below 100%), the system takes over the position and closes it at market. If the fill is better than the bankruptcy price (the price at which your margin is exactly wiped out), the surplus goes to the insurance fund. If it is worse, the fund covers the shortfall. Bybit's help center says exactly this: a fill better than the bankruptcy price sends the remaining margin to the fund, and a fill worse than it is covered by the fund.

When the fund can't cover it, the system picks the top-ranked profitable positions on the opposite side and closes them against the bankrupt position at the bankruptcy price (or whatever price that exchange's rules set). That is ADL. The trader who gets deleveraged did nothing wrong; they were simply on the other side, in profit and highly leveraged.

Rules compared

Sources (checked 2026-10-17): Binance liquidation protocols (updated 2026-01-04), Binance ADL (updated 2026-01-13), Bybit insurance fund (updated 2026-03-24), Bybit ADL (updated 2026-04-13), OKX forced liquidation FAQ (updated 2026-10-05), Gate liquidation mechanism, Gate ADL, Bitget ADL (2025-09-27). Bitget's page contradicts itself on the ADL execution price (both mark price and bankruptcy price appear); the live official rules apply.

How much is in the insurance funds right now?

Four of the five publish their insurance fund balances through official public APIs that anyone can query. These are the numbers we read on 2026-10-17:

Data: official public APIs (Binance insuranceBalance, Bybit insurance, OKX insurance-fund, Gate insurance). Each exchange splits its pools differently, so the numbers can't be ranked directly. Bybit says shared pools update every 24 hours.

Read a fund's size together with what it has to cover. Bybit's BTCUSDT pool backs over a hundred pairs; Binance's fund covers several major contracts at once; Gate gives one figure for all USDT-margined perps. Small coins often sit in small isolated pools (Bybit has several with only a few million USDT), and those pairs hit ADL more easily.

A worked example: liquidation vs your own stop

Say you open a 10x BTC long on Gate with 1,000 USDT of margin, so 10,000 USDT notional. Gate's official API shows a 0.3% first-tier maintenance margin rate for BTC_USDT, which is 30 USDT.

• You close with a market stop just before liquidation: the fee is 10,000 × 0.05% = 5 USDT. With Gate bound through Fee Otter at 70% (20% automatic rebate from the exchange + 50% extra rebate) you pay 1.5 USDT net, and the rest of your margin stays in your account.
• The system liquidates you: the liquidation fee is 10,000 × 0.075% = 7.5 USDT. When liquidation triggers you have roughly the maintenance margin left. After the fee, if the fill beats the bankruptcy price, what remains goes to the insurance fund, not back to you.
• The same position on OKX: the liquidation fee is charged at your taker rate, plus a separate clearance fee equal to the maintenance margin at the moment of liquidation.

Liquidation fees, clearance fees and leftover margin sent to the insurance fund are not trading fees, so none of them earns a rebate. Only the fee on a close you place yourself is rebated. Setting a stop and not letting the system liquidate you is the cheapest way out.

How ADL reaches you: Bybit's official example

Bybit explains it with an example. A pair's insurance fund peaked at 20,000 USDC over the past 8 hours, with a 30% trigger line and a 25% stop line. Position margin on the pair is 1,000 USDC and combined realised and unrealised losses are 8,000 USDC. Drawdown = (8,000 − 1,000) ÷ 20,000 = 35%, above 30%, so ADL starts. The system derives a bankruptcy price from the 30% limit, the deleveraged side pays 2,000 USDC back into the fund to bring the drawdown to 30%, and ADL stops once the drawdown falls to 25% or less.

So ADL does not have to wait for the fund to hit zero. If you are running high leverage on a small coin and sitting on a big profit, you are at the front of the queue. Bybit says lowering leverage lowers your ADL ranking in real time; partly closing reduces how much can be deleveraged but leaves your ranking unchanged. Binance and Bybit both show an ADL indicator next to each position, and more lit bars mean you are closer to the front.

A real case: 10 October 2025

In the crash of 10 October 2025, more than 19 billion US dollars of leveraged positions were liquidated, and FTI Consulting's analysis says high leverage combined with exchanges' ADL turned the sell-off into a liquidation spiral (CoinGecko, FTI Consulting). Plenty of profitable shorts were closed by ADL that night: the profit was banked but the position was gone. Afterwards Binance paid about 283 million US dollars to futures, margin and loan users who had used USDe, BNSOL or WBETH as collateral and were hit when those assets depegged on its platform (The Block). That was the platform's own compensation, not a rule of the insurance fund or ADL.

Why the rules matter

Liquidation rules decide how much the worst case costs you; ADL decides whether your best case gets taken away early. You manage the first with stops and lower leverage, and the second by avoiding pairs with small funds and not staying highly leveraged while in profit. The fee on every ordinary open and close can be partly returned through a rebate; see perp fees: your effective rate after a rebate.

How to lower the odds of liquidation and ADL

1. Put a stop on every trade: a filled stop pays a normal fee and earns a rebate; liquidation does not.
2. Don't max out leverage: higher leverage moves the liquidation price closer and pushes you up the ADL queue.
3. Cut leverage when you're well in profit: Bybit says lowering leverage lowers your ADL ranking immediately.
4. Watch small coins: pairs with small insurance funds hit ADL more easily; check which pool a pair belongs to on the exchange's insurance fund page.
5. Bind the rebate first: register with a referral code and bind your UID on the Fee Otter rebate platform; rebates only count trades after binding (Gate's code is FEEOTTER). On BingX, registering with the code gets you 45% automatically, all paid by BingX, with no UID binding needed.

To get part of the fee back on every stop and close, register with our referral codes and bind Fee Otter now. Exchange-by-exchange futures details: Gate futures guide, Bybit futures guide, Binance futures guide, OKX futures guide, Bitget futures guide.

Service regions

All five exchanges restrict futures in some regions. In some countries only spot is open, or only a locally licensed affiliate's products are, and maximum leverage can differ by region. Check that futures are available where you live and read the exchange's terms before you trade. See crypto exchange licenses by country.

Risks

An insurance fund is a buffer the exchange sets up. It is not deposit insurance and does not mean you can't lose money; its size, pool structure and ADL parameters are set by the exchange and can change at any time. In extreme markets a stop can fill with slippage, and liquidations and ADL can fire in quick succession. Leveraged futures can wipe out your margin in minutes, so only trade with money you can afford to lose.

FAQ

Do liquidation fees earn a rebate?

No. Liquidation fees, clearance fees and leftover margin sent to the insurance fund are not trading fees. Rebates count only the fees on orders you place yourself.

Do I lose money if I'm hit by ADL?

ADL usually hits positions in profit. The position is closed at the rule price and the profit is realised, but the position is forced shut and whatever the market does next no longer helps you. Binance and Bitget both state that no trading fee is charged on ADL.

Which exchange has the biggest insurance fund?

Pools are split differently, so a straight comparison doesn't work. On the official numbers for 2026-10-17, Binance's fund covering BTCUSDT is the largest at about 791 million USDT plus 500 million USDC, but it covers a different set of contracts from the others.

How do I know I'm close to ADL?

Check the ADL indicator next to your position; more lit bars mean a higher ranking. Lowering leverage moves you back.

Is the insurance fund used to repay users after an exchange hack?

The futures insurance fund absorbs liquidation shortfalls; it is not there to cover a platform being hacked. Hack losses are usually covered from the platform's own capital or a separate user protection fund, as with Binance's SAFU fund in 2019.

Rules and insurance fund figures in this article were read from each exchange's official pages and public APIs on 2026-10-17 and can change at any time. The calculations are estimates; actual fees and rebates follow what the exchanges and the Fee Otter platform show live. This article is for information only and is not investment advice.